Luxury hotels sit on land confiscated by Nazis - Business - International Herald Tribune

BERLIN — When Barbara Principe, a 73-year-old retiree from New Jersey, showed her grandsons around here this week, they followed an odd itinerary, stopping to see empty lots in the former East Berlin, as well as Wertheim, an elegant department store in the west.

Principe's forebears founded the Wertheim chain in 1875, and her well- publicized visit to Berlin is part of an increasingly rancorous legal campaign to win restitution for family property confiscated by the Nazis before World War II.

"It was time for my grandsons to see all the properties," she said in an interview on Tuesday. "Everything was taken away. It rightfully does not belong to anybody but the Wertheim family."

Emboldened by a favorable ruling here last month, Principe and her lawyers are ratcheting up the pressure on the German retailer KarstadtQuelle to pay restitution for a disputed five-acre parcel of land in the heart of Berlin that it sold to a developer for $183 million six years ago.

On Monday, Principe introduced her grandsons, Michael Principe Jr. and Brad Giordano, at a news conference in the Ritz-Carlton Berlin hotel, which was built on the site by its new owner, Otto Beisheim.

"I'm here to send a message to Karstadt that if the company wants to keep playing games and postponing, it's not going to end with me," she said. "My grandchildren are informed, and there are 14 of them."

Principe, the daughter of Günther Wertheim, fled Berlin with her family in 1939 when she was 6. Her father, who with his brothers had been partners in the Wertheim stores, settled in southern New Jersey, starting a chicken farm not far from where Principe still lives.

With the vast amounts of money and an illustrious Berlin retailing name involved, the Wertheim affair has become one of the most closely watched restitution cases since the reunification of Germany in 1990.

The case, people on both sides say, is cloaked in complexity, much of it having to do with the tangled history of postwar Germany. Some of the family's properties, like the Wertheim store itself, were sold by Principe's father in 1951 and are not the subject of restitution cases.

Other pieces of land in East Berlin were turned over last year by the German Restitution Authority to the Conference on Jewish Material Claims Against Germany, a group based in New York that filed suit on behalf of the family after the fall of the Berlin Wall.

KarstadtQuelle, a giant department store chain that inherited all the former Wertheim family businesses in 1994 through its acquisition of another German chain, did not contest these transfers.

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But the company said it would vigorously appeal the ruling last month, also by the restitution authority, which rejected its claim to the five acres on the northern edge of the Potsdamer Platz.

"To our mind, this case is quite different," a spokesman for KarstadtQuelle, Jörg Howe, said. "Apart from any moral discussions, we have to be 100 percent sure that there is a definite legal decision on this. Otherwise, we will be sued by our shareholders."

KarstadtQuelle's chief executive, Thomas Middelhoff, said in an interview that the dispute put him in an awkward spot. "This is not easy for me, but I have to respect our legal position," he said.

Middelhoff won praise in his last job, as chairman of the media conglomerate Bertelsmann, for commissioning an independent investigation of that company's conduct during the Nazi regime.

The dispute over this real estate is complicated by geography and money. In 1949, when Berlin was divided into eastern and western areas of control, the empty lot became part of East German territory.

In 1961, however, it was cut off from the rest of East Germany when the Soviets hurriedly put up the Berlin Wall and did not properly follow the lines of demarcation. In 1988, officials in East and West Berlin arranged a land swap to rectify the error, putting the land on western soil.

"We like to say it went from being a 'no man's land' in the literal sense to a 'no man's land' in the legal sense," said Gary Osen, a New Jersey lawyer who represents the Wertheim heirs.

Legal nuances aside, he said, this land is also different because KarstadtQuelle sold it to Beisheim for a princely sum. The developer then spent hundreds of millions of dollars building the Ritz-Carlton, a Marriott hotel, luxury apartments and offices, calling the complex the Beisheim Center.

A spokeswoman for the center said this was a "legal issue between the Jewish claims conference and Karstadt."

Osen said neither the claims conference nor the Wertheim family wanted to take back the property. "It's one thing to visit the Ritz; it's another thing to end up owning it," he said. But Osen said Principe and her family were entitled to a fair settlement for their loss.